Stephen Lendman: Heading for Economic Collapse!

- Heading for Economic Collapse!
by Stephen Lendman, http://sjlendman.blogspot.sg/The late Bob Chapman predicted it years ago. So does Paul Craig Roberts. It could “destroy Western civilization,” he believes. Untenable political and financial decisions put US and European economies on a collision course with disaster. Bailouts and market manipulation delay the inevitable.
–A tipping point approaches. Only its timeframe is unknown. Money power runs world economies. Wall Street and giant European banks run Western societies.“Financial deregulation converted the financial system (into) a gambling casino….,” says Roberts. Zero interest rates destroy household savings. Media scoundrels suppress ugly truths.
–Western governments letting banking crooks scam the system for profits “is a system that is headed for catastrophic failure.”Bad news keeps getting worse. Public acknowledgement arrives late. Moody’s June 21 downgrade of 15 major banks conceded what’s been known for years.
–Giant Western banks are zombies. They’re insolvent. Taxpayer funded bailouts alone keep them operating. Moody’s warned last winter than downgrades were coming. So-called stress tests suppress more than they revealed.–Ellen Brown calls the “derivatives casino….a last-ditch attempt to prop up a private pyramid scheme.” It’s slowly crumbling under its own weight. JPMorgan Chase is considered America’s most stable bank. Brown calls it bankrupt. Evidence, she says, shows it’s acknowledged $2 billion loss perhaps exceeds $30 billion.–Roberts explained that America’s five largest banks hold $226 trillion in derivative bets. For example, JPMorgan’s total assets approach $2 trillion. Its derivatives holdings exceed $70 trillion. Its risk capital is about $136 billion. Its “derivative bets are 516 times larger than the capital that covers the bets.”–Goldman Sachs “takes the cake,” says Roberts. Its $44 trillion in derivatives speculation “is covered by only $19 billion in risk capital.” In other words, its bets are “2,295 times larger than” cash on hand covering them.–Derivatives bets by America’s five largest banks exceed US GDP over 15-fold. Corrupt politicians allowing it assure eventual economic collapse. Banking executives are serial liars. After Moody’s downgrades, Citigroup and Bank of America officials said its action failed to reflect “safeguards” in place for years.–Roberts destroyed their argument. So did Brown and other independent analysts. Moody’s and other rating agencies long ago lost credibility. They failed to acknowledge the sub prime crisis until headlines revealed it. They bogusly call toxic assets safe in return for large fees and big profits.
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Economic collapse is broad range of bad economic conditions from a severe, prolonged depression with high bankruptcy rates and high unemployment, such as the Great Depression, to a breakdown in normal commerce